What is a stock market correction?
A 10% drop in stocks from their peak. Since Jan. 26, the S.&P. 500 has fallen 10.16 percent. (I currently have 90% in the S.&P. 500 for one of my investment accounts…OUCH!!!)
Who do corrections affect most?
Short term traders and those who heavily leveraged their account with the use of margin (an example would be a day trader).
Thankfully not me 🙂
I’m a long-term investor so this isn’t freaking me out. I know that corrections are an inevitable part of stock ownership. And so are peaks $$$
What should you do?
That is up to you. Me? I am going to reassess my investments. Maybe change my percentages up a little. Possibly buy more stocks since they are relatively cheaper than they were a few months ago. BUT I WILL NOT BECOME JUST A CONSUMER AGAIN.
If you’re retired or going to soon, here is a great article to read from the Huffington Post.
And again, this is about the long term. The stock market, as measured by the S&P 500 Index, has had an average annual return of 10.31 percent from 1970 to 2016. In dollar terms, if you had invested $10,000 in the S&P 500 in 1970, by the end of 2016, your investment would have grown to $1,005,588. The worst one-year return for the stock market was in 2008, when it dropped 37 percent.
Don’t freak out if you are. Do your due diligence. History will show you the stock market trend.